For the first time in history more than half the world is middle-class-thanks to rapid growth in emerging countries.
The Economist, February 14, 2009
Sometime last year, the world we inhabit went from Civilization 2.0 to 3.0. And if you are an association with an eye to serving a wider, more diverse audience beyond the shores of the United States, then this news is very compelling. Every product or membership manager needs a customer, and for those of us who are in the business of finding new markets and customers for our products, the emerging market countries are building a powerful new customer base.
Here in American over 90% of our people are middle class or better. Japan is 85%, UK and Italy 80%, France 78%, and Germany 75%. Among the 30 most developed countries in the world, our societies have come to expect as a right the opportunity to pursue personal and professional wealth.
Get ready for “hundreds of millions” (see inset) more who will add their collective effort to improve themselves, their local communities and contribute to the great globalization of supply and demand that drives economic consumption around the world.
To reach this new demand, one must build business relationships in these regions to demonstrate local presence and a willingness to contribute “locally relevant” products and services. In his new book “The Second World Empires & Influence in the New Global Order,” Parag Khanna urges organizations that to succeed you must have good local relationships, a team who can execute sound local tactics, and a strategy that conveys value that can drive local needs be they personal professional or at an enterprise level.
At our products and services panel session on Friday during the ASAE IC09, ASME, SHRM, and IMA shared an upbeat assessment. Here is our presentation which includes non US business data as well as links to the Economist Special Report and Pew Research Study on the global middle class.
In 2008, MCI conducted a study of US and EU based associations who were engaged around the world in growing a business presence. The purpose was to understand the challenges and opportunities they experienced and what are the ingredients of a sustainable regional market. We learned that to succeed in growing your business globally you must have the:
- Ability to scale your operations to market demand and this normally requires good local marketing, PR, and business development skills.
- Capacity to deliver locally relevant products & services which means having the ability to adapt and manage increasingly large and complex transactions.
The biggest challenges facing these associations was a combination of a lack of local regional knowledge and experience combined with weak and immature volunteer leadership structure.
Meanwhile they remain optimistic about the next 12-24 months as many are executing plans to conduct regional meetings of various sizes, improve brand awareness, increase membership and locally relevant product sales, and find ways to grow participation in our local, regional, international activities.
What are the ingredients sought that can build a sustainable regional market? The answers lie in four key areas:
1. Proper infrastructure - being close to a good prospect base (corporate, academic, government), access to operational services with low barriers like voice over IP (VOIP) technology
2. Fair regulatory and business environment - having your association’s purpose and mission recognized locally to benefit from tax, legal and social laws while being able to operate open and transparently
3. Access quality local service providers - using local expertise to provide the scalability and capacity needed to create and sustain a business presence
4. Proper staff resources - locating people with the right combination of technical industry knowledge and functional expertise in some combination
Profit now by positioning yourself by developing and executing your own global growth strategy:
- Market Analysis and Business Plan: There is no substitute for “in the field” market research collected directly from your customer and member segments in targeted regions.
- Product Management: Make sure local experts are involved in adapting your product or service to each region, and that you have the ability to scale your service delivery inside the region instead of from headquarters.
- Membership: Cultivate participation by giving your local leaders a say in how to create local activities.
- Marketing Communications: Rather than just translating your material, make the content relevant to local audiences.
- Meetings: Select partners with solid local knowledge and expertise in areas including marketing and promotion, sponsorship development, destination management, housing, currency risk, registration and meeting logistics.
Despite today’s economic challenges, meeting the needs and fulfilling the aspirations of members remain critical for the future of all associations. At the same time, globalization trends point to opportunities for associations to maximize their growth and revenue potential. Five years from now, the organizations that will be in the best position are those that - despite the challenges - have identified those opportunities and pursued them effectively.